"The effort we should be making is with the Association of South-East Asian Nations (ASEAN).

"In fact, I'm suggesting in the speech we should be a member of ASEAN.

"We should be redoubling our efforts on the bilateral relationship with Indonesia.

"Where Indonesia goes strategically so go we, in which case the rise of that great state is centrally important.

"Our strategic bread is entirely buttered in the Indonesian archipelago.

"This is at our neighbourhood, this is at our doorstep - rather than simply trying to second guess the Americans and the Chinese about the South China Sea or North Asia."

'Real foreign policy'

The Government is looking to boost its credibility when it comes to its Asian foreign policy, with Prime Minister Julia Gillard talking up Australia's future in the region at a community cabinet form in Brisbane last night.

"The region which will shortly become home to more middle-class people than anywhere else on the planet, people who will want to buy the things Australians are good at making and good at selling. This is a huge opportunity for us," she said.

But Mr Keating says if Australia wants to be more relevant to Asia it must develop what he calls a "real foreign policy" - one which is independent and does not centre on managing alliances.

He says Australia will always be friends with the US, but the strategic power of the west is diminishing.

"I think that we are far too deferential to what we see as the proclivities of US foreign policy vis-à-vis our own," he said.

"Not knowing when to strike out on your own, not knowing when to map out your prerogatives and where the lines are all blurred with their own.

"(Former prime minister John) Howard described himself as a deputy sheriff, remember this, in Asia.

"In the WikiLeaks cables, the Chinese discovered that Kevin Rudd was urging the Americans to keep the military option open against them. This is hardly a friendly gesture.

"And of course we had President Obama make an aggressive anti-Chinese speech fundamentally in our parliamentary chamber, the so-called pivot speech.

"We're in the lee of the great whoosh of American policy making for good or for bad - we have been.

"Now, we're entitled to pick the eyes out of it, but we should not expect to be taken for bunnies."

Opposition foreign affairs spokeswoman Julie Bishop says Australia does not have to choose between the US and Asia.

"I believe that with careful diplomacy and extensive consultation, we can have the United States as our military ally and closest friend, but that doesn't preclude us having strong relationships in the region particularly with China, Japan, Indonesia, India, for example," she said.